I spoke with Forex Analytix’s Dale Pinkert today and noted that there is an opportunity to buy the US dollar, especially against the euro. China’s growth and Japan’s inflation will be the focus in the second half of this year. Check out the video or the brief summary below.
euro performance: Until yesterday, we observed an eight-day consecutive rise in the euro. If you’re thinking of selling, now might be your chance. I pointed out that UK inflation appeared to be easing slightly, suggesting that the initially expected 6.5% rise may have been overdone.
US housing market: I’ve been bullish on the U.S. housing market for a long time and still think there’s about 30% more room to grow. The market currently feels supply constrained, but we expect it to spread to a larger market eventually. But I think the Fed may face some challenges in managing this growth.
stock speculationn: I explained the recent surge in stock speculation. I don’t think the Fed is too worried about the current market dynamics unless there is a lot of speculation. I particularly emphasized the influence of AI in attracting investment through remarkable technological progress.
inflation and growth: I took a closer look at the inflation numbers and concluded that these numbers seem to be more for quick comparisons with last year’s numbers than for true growth. But I warned that the comparisons will be even tougher towards the end of the year.
Outlook for the rest of the year: We feel divergence trading will be a major focus for the rest of the year. While I expect a stronger dollar in the second half of the year, I believe the only place to show particular strength is the challenge for the US economy.
yield and stock price: I pointed out concerns about stock prices. So I’m now buying the bond market in hopes of lower yields. I linked this decision with a risk-off event that could lead to a favorable move in bonds.
market optimism: Despite my worries, I have maintained a bullish outlook on the economy and equities throughout the year. However, I found it interesting that many economists are now leaning toward the “soft landing” theory, even though the same people were predicting a recession not so long ago. Notice this sudden change.
Money: I’m bullish on gold and expect seasonal trading to pick up as we head into the second half of the third quarter. Even if the dollar is likely to rise in the future, I would suggest there could be an opportunity to buy gold, preferably if the price falls below $2,000.
oil: I’m an oil bull and I agree that WTI has turned around recently. However, I am waiting for the upcoming EIA numbers and material extractions before I increase my confidence. I warn that going overly bullish above $90 could be risky if OPEC’s capacity is not fully utilized. We expect the price to rise to around $80-$85.
Other products: We acknowledge the importance of cereals, steel and timber in commodity markets, but note that they have received less attention in foreign exchange. I think it’s a product that deserves attention.
market observation: We recommend keeping an eye on China and Japan and keeping an eye on the US dollar price movements. It also emphasizes the importance of being grateful for what we have in life, not just the market, reminding traders of the human side of our participation.
